Skift Take

These startups are taking aim at the travel industry’s legacy payment systems, which Omicron will be putting to the test again this winter.

Two fintech companies are extending their reach further into new territories, riding the wave of payment digitization and setting their sights on travel.

Singapore’s Nium has now completed its acquisition of business-to-business travel payments platform Ixaris, and its U.S. expansion is on track with co-founder and CEO Prajit Nanu having relocated to San Francisco. Irish-American startup Stripe meanwhile has teamed up with TripActions to grow in Europe.

Nium spots new opportunities to expand, in part due to the latest Omicron variant causing widespread disruption and changes in money flows, not least with airline refunds.

“There’s a groundswell for digitization of payments, beyond archaic payment channels like (International Air Transport Association’s) Billing and Settlement Plan, ARC, invoicing and credit,” said Spencer Hanlon, Nium’s global head of travel, and head of Europe.

Because of the latest coronavirus scare — which on Monday saw it claim its first death in the UK — Hanlon said Nium saw a 50 percent decline in travel payments in the past two weeks alone. “I’ve never seen these sorts of instabilities so quickly and at this scale,” he said. “Demand is pushed down, but will bounce back. You can’t rely on the old processes that used to manage that.”

Airlines and passengers have reached some middle ground when it comes to refund policies around last-minute cancellations — after all, they’ve had nearly two years of practice — but as travel had significantly ramped back up, large volumes of calls will now impact call centers and cause more payment headaches.

By expanding into the U.S., Hanlon said Nium wants to act as a “mosaic” and make cross-border payments easier. Its card issuance business includes more than 30 countries, with 31 million physical and virtual cards already issued. It also supports pay-outs to 190 countries in 100 currencies.

Meanwhile, global payments platform Stripe has partnered with corporate travel agency TripActions to launch its expense management product Liquid in Europe.

The use of contactless payments has rocketed due to safety and hygiene concerns during the pandemic, as they reduce time spent queueing and handling credit cards.

Now TripActions is promoting its smart card with built-in policies and issuance in multiple currencies. The agency claimed it has created a “superapp” as the platform combines travel, a corporate card and an expense management solution in one go. Its other fintech partners include Visa, Modern Treasury and Plaid.

“TripActions Liquid is a powerful example of the possibilities enabled by Stripe’s global financial infrastructure,” said Eileen O’Mara, revenue and growth lead for Europe, the Middle East and Africa at Stripe. “Running smart corporate cards with programmatic spending controls and reconciliation across multiple countries was unfathomable just a few short years ago.”

On December 7, TripActions said its Liquid offering had averaged 34 percent monthly growth in transaction value so far this year, although the Omicron variant may curtail this rate. “Companies clearly can no longer afford to use those antiquated, analog systems,” said Ariel Cohen, TripActions co-founder and CEO.

Further ahead, Nium’s Hanlon said the U.S. will act as a springboard to enter the Latin America region, where inflation is starting to impact tourism. In Argentina, buy-now-pay-later schemes are being banned for foreign travel as the country enters negotiations to pay off some of its debt. Hanlon said it’s an area where Nium, which operates in many countries, may be able to intervene. “You need to understand it, but there’s an opportunity if you can defeat that complexity,” he said.

The worlds of finance and tourism continue to merge, and following U.S. Bancorp’s acquisition of TravelBank and Capital One’s own investments in booking platforms, expect the embattled travel sector to further pique their interest.

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Tags: digital payments, expense management, expense technology, iata, tripactions, visa

Photo credit: Contactless payments were initially adopted at scale at the start of the pandemic due to safety and hygiene concerns. Nenad Stojkovic / Flickr

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